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HomeMy WebLinkAboutEDA AGN 01-27-09 AGENDA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY IMMEDIATELY FOllOWING THE 7 PM HRA MEETING January 27, 2009 Parkview Villa, 965 40th Avenue NE, Columbia Heights 1. Call to Order/Roll Call Gary L. Peterson, President Marlaine Szurek, Vice President Bruce Kelzenberg, Secretary/Treasurer Tammera Diehm Bobby Williams Bruce Nawrocki Gerry Herringer 2. Pledge of Allegiance CONSENT AGENDA 3. Election of Officers President Vice President SecretarylTreasurer 4. Approve Minutes of September 23 and December 8, 2008 and financial report and payment of bills for September, October, November and December 2008, on Resolution 2009-01. Motion: Move to Approve the consent agenda items as listed. BUSINESS ITEMS 5. Adopt Resolution 2009-02, Rehab Incentive and Single-Family Home Deferred loan Program Funding Motion: Move to waive the reading of Resolution 2009-02, there being an ample amount of copies available to the public. Motion: Move to Adopt Resolution 2009-02, a Resolution Approving Funding for the Rehab Incentive Program ($50,000) and the Single-Family Home Deferred Loan Program (SFHD) ($35,000) to the Greater Metropolitan Housing Corporation (GMHC). 6. Adopt Resolution 2009-03, 2009 Consulting Services Agreement with GMHC Motion: Move to waive the reading of Resolution 2009-03, there being an ample amount of copies available to the public. Motion: Move to Adopt Resolution 2009-03, approving the 2009 Consultant Services Agreement with the Greater Metropolitan Housing Corporation (GMHC), and appropriating $15,000 from Fund 408- EDA Housing Maintenance for the same; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. 7. Adopt Resolution 2009-05, Amendment to Contract for Private Redevelopment Motion: Move to waive the reading of Resolution 2009-05, there being an ample amount of copies available to the public. Motion: Move to Adopt Resolution 2009-05, Amendment to Contract for Private Redevelopment by and Between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and the Greater Metropolitan Housing Corporation, dated November 27, 2007. 8. Commercial Development Agreement for 4707 Central Avenue Motion: Move to set a Special EDA meeting for Monday, February 9, 2009 at 6:30 p.m. in the City Hall, Conference Room 1. 9. Adopt Resolution 2009-07, Schafer Richardson Redevelopment Timeline Motion: Move to waive the reading of Resolution 2009-07, there being an ample amount of copies available to the public. Motion: Move to Adopt Resolution 2009-07, a Resolution........... 10.Adopt Resolution 2009-04, Decertification of TIF Districts P3/P4/S7 Motion: Move to waive the reading of Resolution 2009-04, there being an ample amount of copies available to the public. Motion: Move to Adopt Resolution 2009-04, a Resolution Approving the Decertification of Tax Increment Financing Districts P3/P4/S7 of the City of Columbia Heights. 11. Adopt Resolution 2009-06, Amend Contract with GMHC for Additional Financial Assistance for 4141 Jefferson Street Motion: Move to waive the reading of Resolution 2009-06, there being an ample amount of copies available to the public. Motion: Move to Adopt Resolution 2009-06, Amendment to Contract for Private Redevelopment by and Between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and the Greater Metropolitan Housing Corporation dated, May 14,2007. 12.Administrative Report 13.0ther Business The next regular EDA meeting will be Tuesdav. Februarv 24. 2009 at City Hall. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: January 27,2009 AGENDA SECTION: Consent Agenda ORIGINATING EXECUTIVE NO: 3 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Election of Officers BY: Cher Bakken BY: DATE: January 20,2009 BACKGROUND: The Bylaws of the Columbia Heights EDA specify in Article II-Section 1, that the offices of President, Vice-President, Secretary, and Treasurer be elected annually. We have attached a Transcript of Proceedings outlining the process for nomination of persons to the various offices. According to Article III-Section 4 four commissioners constitutes a quorum, and as such, election of officers may be held. RECOMMENDATION: Move to cast a unanimous ballot nominating and appointing for President, for Vice President, for Secretary; for Treasurer. RECOMMENDED MOTION: Move to cast a unanimous ballot nominating and appointing for President; for Vice President; for Secretary; for Treasurer. Attachment EDA ACTION: H:\consent Form2009\EDA Election of Officers EDA ELECTION PROCEDURES . We will know have the Election of Officers. . Nominations are know being taken for the office of (Office). (After a nomination is made) 1. has been nominated. 2. Are there any other nominations? 3. Are there any other nominations? 4. Are there any other nominations? 5. If NONE - All those in favor say aye. Opposed nay. 6. The chair declares elected as (Office). OATH OF COMMISSIONER OF COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY COLUMBIA HEIGHTS, MINNESOTA I, , do solemnly swear that I will support the Constitution of the United States and of the State of Minnesota and will faithfully discharge the duties of the office of Commissioner of the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota, according to the law and to the best of my judgment and ability, so help me God. I do further swear that I am, and was at the time of my appointment, a resident of Columbia Heights, Minnesota. (s) Subscribed and sworn to before me this day of , 2009. (s) Notary Public My commission expires: Economic Development Authority (EDA) Spccial Meeting Minutes December 8, 2008 CALL TO ORDER/ROLL CALL President, Gary 1. Peterson called the meeting to order at 6:55 p.m. Present: Gary 1. Peterson, Tammera Diehm, Bruce Kelzenberg, Bruce Nawrocki, Bobby Williams, Gerry Herringer. Marlaine Szurek City Manager, Community Development Director, Assistant Community Development Director Absent: Staff: PLEDGE OF ALLEGIANCE Res.2008-16. Approvinl! the Terms of Interfund Loan in Connection with K-Mart/Central Avenue TIF District Staff introduced the resolution before the EDA to approve terms of an Interfund Loan in connection with K-mart/Central Avenue TIF district. The interfund loan is for the purchase ofa duplex located at 4636 Polk Street. Motion by Diehm, second by Kelzenberg, to waive the Reading of Resolution 2008-16, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2008-16, a Resolution Approving the terms of an Interfund Loan in connection with K-Mart/Central Avenue TIF District. Discussion: Nawrocki commented that it is premature to use these funds. He is not sure if we should buy the property at 4636 Polk Street. Clark explained the language of the resolution. Upon Vote: Peterson- aye, Herringer-aye, Kelzenberg -aye, Williams -aye, Nawrocki -nay, Diehm-aye. Motion Carried. RJo:So./,UTION NO. 2008-16 APPRo.VING THE TERMS 0.1" INTERFUND WAN IN CONNECTION WITH K-MART/CJo:NTRAL A VENUE 711" DISTRICT BE IT RESo.LVJo:D flY TllE Bo.ARD 0.1" COMMISSIo.NERS 0.1" THE Co.LUMBlA HEIGHTS ECo.NOMIC DEVELOPMENT AUTHo.RITY (mE "AUTlIORITY'j AS Fo.LLOWS: Sectionl. Backf!/'olllld 1,01. The Authority and City ofCo/ulllbia Heights ("City") have established the K-Marf/Centml Avenue Tax Increment Financing District (the /l71fo'District") within the Celllral Business District Redewlopmenl Project (the "Project"), and have adopted a tax increment financing plan ("TlF l'lan '') for the pl/Ipose of fil/(/IIcillg certain impl'Ovemcnls wi/hill the Project. 1.02. The Authority 01' City may inclll' certain costs related to the TIF District or Project, which costs may be financed all a temporary busisfrom available Authority or City fimd'i. /.03 l1/e City, /Ising {lI'ailable City fimds, intends to acquire certain property in the City located at 4636 Polk Street (the "Property'') within the Project, all or a portioll a/which Property the Authority or City may lIse tofwther redevelopment of the Project. 1.04. The Properly is nol cu/'rento' within Ihe TlF Districl, bUllhe AUlhority inlends to e.\pwld Ihe TIP Districl boundaries 10 include Ihe Properly, as slIch e::qJallsioll willjimher Ihe Aulhority's redevelopmenl Koals and objeclives. 1.05. 711e Authority intends to reimburse Ihe City for the cosl of acquisition of the Properly, closing cosls, and demolilion (Iogelhel~ Ihe "Qualified Cosls") from tax il/crell/el/ls derived from the TIF District in accordance with Ihe lerms of Ihis resolution (which terms are reftrl'ed 10 colleclivelyas the "TIP Loan ''). Seclion2. Terms ofTIF Loan 2.01. SubJecl to Ihe cOl/ditiolls described in Section 2.07, Ihe Authority shall repay, 10 the City jimdfrom which Ihe Qualified Cosls are il/itially paid 01' adwtllced, the principal amollnt ofjimds adwmced nollo exceed $116,500 logelher with intere.~1 on the principal amount adwlIlced, accl'uingfi'011/ Ihe date of each inilial e:qJendilure 01' advance. For e>.penditures made ill 2008, the interesl rate shall be 8.0%, which is Ihe grealer of (a) the rale specified lindeI' Minnesota Statules, Section 270C.40 01' (b) the rate specified under Minnesola Slatules, Seclio1l549.09 for 2008. For expenditures made in 2009. the interest rale shall be reset to the greater of (a) Ihe rale Jpecified III/del' Minnesota Slatlltes, Section 270CAO or (b) the rate specified lindeI' Milmesola Slatutes, Seclion 549.09 for 2009. 2.02. Principal and interest ("Payme1/ls'~ shall be paid semi-ml1lually 0/1 each Augusl I and Febl'llwy I ("Payment Dales"), cOlllmencing onlhe first Payment Dale after the first advance of Qualified Costs and continuing Ihrough the earlier of (a) the date the principal and accrued interest oflhe TIF Loan is paid infllll, 01' (b) the dale oflaslreceipt of lax il1crementji'01/1lhe TIP Districl. Payments will be made illlhe amoullt and ollly to the extent of Available Tw: Increment as hel'einlffter defined. Payments shall be appliedfirst to accrued interesl, and then to IInpaid principal. Interest accrllingji'om the date of each expenditure to Ihefirst Payment Dale shall be compollnded semiannually on Febl'lwI)' I and Augllst I of each year and added 10 pl'incipal, IInless otheJ1l'ise specified by Ihe Executive Director. 2.03. Payments on this TIF Loal/ are payable solely from ''Available Tax Increment." which shall mean, 01/ each Paymenl Date, all of lhe tax incremenl generated in the preceding six (6) months with respect to the properly withillthe TlF District and remitted to the Authority by Alloka County, (lfier deduction of any tax incremenl allocated to administratil'e e>'7Jenses, all in accordance with Minnesota Statules, Sections 469.174 to 469.179. Paymenls OIllhis TlF Loan are subordinate to any outstanding orjillure /lotes 01' obligations issued to developel~~ or third parlies secured in whole or in part 1I'ilh Available Tax Increment, alld are on parity with any other olllslanding orfuture inte/fimd lmms seC//red inll'hole or il/ part with Available TeL'!; II/cremenl. 2.04. The principal s/lm and all accrued illterest payable lindeI' this TIF Loan are pre~fJayable in whole or in part at any time by the Authority without jJremium 01' penalty. No parlial prepayment shall qffecllhe amoullt or timing oj any olher regular paymenl olhe/wise required 10 be made under this TlF Loan 2.05. This TIF Loan is evidence of an inlen/al borrowing by the Authority in accordance 1I'ilh Minnesota Statutes, Section 469.178, sllbdivision 7, and is a limited obligation payable solely fl'Om Available Tax Incremellt pledged 10 Ihe payment hereof under this resolulion 1Ms TIF Loan and the interesl hereon shall not be deemed 10 conslilllte a general obligation of Ihe State of Mil/nesota or any political sllbdivision thereof, inclllding, without Iimitalion, the City. Neither the Stale oj Minnesola, 1101' any political subdivision thereof shall be obligaled 10 pay the principal of or il/terest 011 this TlF Loan O/' Olher costs incident hereto except out of Available Tat Increment, and neither the fullfaith and credi/nor Ihe laxing power of the State of Minnesola or any political subdivision thereof is pledged to the paymenl of the principal of or interesl on this TlF Loan a/' other costs il/cident hereto. 111e Authority shall have 110 obligation to pay any principal amollflt oj Ihe 711" Loan or accrued interesllhereon, which may remain IInpaid after Ihefinal Payment Date. 2.06. nJe Authority may amend the terms of this 11F Loan at mtY time by resolution of Ihe Board, including a determinatiollto forgive the outstanding principal amollnl alld accrued interest to the extent permissible under law. 2.07. Notwithstanding anylhing to the conlnll)' herein, as a cOlllliliolllo making allY paymentllllder the 111" Loan, Ihe Authority shall approve, and obtain City approval of a modification of the TIF Plan to inelude Ihe Properly withinlhe 71F District area. Section 3. Effective Date. This resolution is effictil'e uponlhe date of its approval. Adopted this Il' day of December, 2008. Acting Recording Secretary Sheila Cartney, Assistant Community Development Director ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES September 23, 2008 CALL TO ORDER/ROLL CALL President, Gary L. Peterson called the meeting to order at 7:01 p.m. Present: Gary L. Peterson, Bobby Williams, Bruce Nawrocki, Tammera Diehm, Marlaine Szurek, Gerry Herringer and Bruce Kelzenberg Staff Present: Walter R. Fehst, Executive Director, Scott Clark, Deputy Executive Director and EDA Attorney, Steve Bubul Motion by Williams, Second by Diehm, to approve Scott Clark as Secretary Pro-tem. Motion Carried Unanimously. PLEDGE OF ALLEGIANCE CONSENT AGENDA Approve Minutes of August 26 and September 15, 2008 meetings and the Financial Report and Payment of Bills for the month of August 2008 on Resolution 2008-15. Nawrocki asked a series of questions on the claims list and the overall financial report. Clark would get back to the EDA regarding a revenue question relating to ad valorem taxes. Motion by Kelzenberg, second by Williams, to approve the consent agenda All ayes. Motion Carried. EDA RESOLUTlDN 2008.15 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STA TEMENT FOR AUGUST 2008 AND PA YMENT OF BILLS FOR THE MONTH OF AUGUST 2008. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of August 2008 and the list of biffs for the month of August 2008 are attached hereto and made a part of this resolution; and WHEREAS, the EDA has examined the financial statement and the list of bills and finds them to be acceptable as to both form and accuracy. NOVY,. THEREFORE BE IT RESOL VED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the attached financial statements and list of biffs, which are attached hereto and made a part hereof, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the list of biffs as presented in writing are approved for payment out of proper funds; and BE IT FURTHER RESOL VED this resolution and attachments are to be made a part of the permanent records of the Columbia Heights Economic Development Authority. Economic Development Authority Meeting Minutes September 23, 2008 Page 2 of 10 BUSINESS ITEMS Resolutions 2008-12 and 13. Fourth Amendment to Contract for Private Redevelopment-Grand Central Lofts and Contract for Private Redevelopment- 4707 Central Avenue *At the September 15, 2008 EDA meeting staff informed the Commissioner's that the development under consideration suffered a setback due to not being able to secure a lease with Buffalo Wild Wings, and in turn, the project may not commence until Spring of 2009. Staff has revised the Agreements so that it covers three possible development scenarios: 1) the developer constructs immediately, the sanitary sewer expansion, the Aldi's building and the parking ramp (Phase I) and the foundation for the commercial Phase II building; 2) This fall, the developer constructs only the building foundations for both Phases, including the parking ramp. This would allow spring construction to commence in March of 2009; and 3) No work commencing until the spring of 2009, this possibility creates the change in the Agreement that work must commence by May 1, 2009 but holding the completion date at December 31,2009. It is important to note that the Pay-As-You-Go Tax Increment of $440,000 would not change and would not be issued until the entire project is complete. Clark presented to the EDA modifications to the 4th Amendment, specifically changes to the Completion Certificate Section and item 4.3 regarding the completion date for Phase 2. Herringer was not satisfied regarding the language change for 4.3 and Bubul explained that the language, as written, was constructed since the Housing Developer had no contractual obligation regarding a commencement date, only a completion date for Phase 2. The EDA agreed to no changes in language. Herringer then stated that it was his opinion that although the Agreement definitions stated "owner occupancy" regarding the housing units, that the EDA had previously agreed to insert additional language within the body of the Agreement. Bubul was directed to include this language and it was agreed that these modifications will be made and that the EDA will receive a new copy of the Agreement. Motion by Diehm, second by Kelzenberg, to waive the reading of Resolution 2008-12, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2008-12, a Resolution Approving the 4th Amendment to Contract for Private Redevelopment and Awarding the Sale of, and Providing the Form, Terms, Covenants and Directions for the Issuance of its Taxable Tax Increment Revenue Notes, Series 2008A; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Nawrocki asked for a synopsis of what this Agreement was giving to the respective Economic Development Authority Meeting Minutes September 23, 2008 Page 3 of 10 parties. Clark gave a synopsis of the same. Clark gave a brief review of the contract between the EDA and Grand Central Commons LLC. Clark specifically read the new language regarding the Metropolitan Grant to have the EDA understand that although staff was confident in gaining a one- year extension that no contractual representation was being made regarding the same. Clark also noted that new language regarding minimum assessment agreement amounts and pro-rations, Section 6.3 of the contract, was also disbursed. Herringer asked a series of questions on the tax increment note. An error was found in the tax increment note regarding maturity date and the end date of 2018 will be amended to read 2021, which is consistent with the rest of the Agreement. Bubul clarified to the EDA that a tax increment note does not carry an amortization schedule but is paid back through "available tax increment", as defined in the contract. Tax increment proceeds are first used to pay accrued interest and then principle. Clark also explained how the process works to develop the proposed tax increment amount including the review by a third party of the developer's pro forma and expected project cash flow. The EDA will receive a new copy of the Agreement upon final draft, Motion by Diehm, second by Williams, to waive the reading of Resolution 2008-13, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Diehm, second by Williams, to Adopt Resolution 2008-13, a Resolution Approving the Contract for Private Redevelopment and Resolution Awarding the Sale of, and Providing the Form, Terms, Covenants and Directions for the Issuance of its $440,000 Taxable Tax Increment Revenue Note, Series 2008B; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. RESOLUTION NO. 2008-12 RESOLUTION APPROVING FOURTH AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT AND AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE TAX INCREMENT REVENUE NOTES, SERIES 2008A BE IT RESOL VED BY the Board of Commissioners ("Board'? of the Columbia Heights Economic Development Auf/1Ority, Columbia Heights, Minnesota (the "Authority') as follows: Section 1. Authorization: Award of Sale. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the Kmart/Central Avenue Tax Increment Financing District (the "TlF District'? the Downtown CBD Redevelopment Project (the "Project'?, and Ilave adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. In connection with the TlF District, the Authority entered into a Contract for Private Redevelopment between the Authority and New Heights Development, LLC (now known as Grand Central Properties, LLC) dated as of September 22, 2004, as amended by a First Amendment thereto dated as of April 26, 2005, a second amendment thereto dated as of November 22, 2005, a Third Amendment thereto dated as of August 28, 2007 and intends to enter into a Fourth Amendment thereto referenced below (collectively, the ''Agreement'? Economic Development Authority Meeting Minutes September 23, 2008 Page 4 of 10 Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TlF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Increment Revenue Notes in the principal amount of $700,000 (the "Notes'? for the purpose of financing certain public redevelopment costs of the Project. 1.02. Aooroval of Contract Amendment. The Fourth Amendment to Contract for Private Redevelopment between the Authority Grand Central Properties, LLC ("Grand Central Properties'? is approved in substantially the form on file in City Hall, subject to modifications that do not alter the substance of the transaction that are approved by the President and Executive Director, provided that execution of the amendment by such officials is conclusive evidence of and their approval. 1.03. Issuance. Sale. and Terms of the Notes. The Authority hereby delegates to the Executive Director the determination of the date on which the Notes are to be delivered, in accordance with the Agreement. The Notes shall be issued as foffows: one Note in tl1e original principal amount of the Housing Redeveloper Portion issued to Grand Central Properties; and one Note in the original principal amount of the Commercial Redeveloper Portion issued to Grand Central Commons, LLC ("Grand Central Commons'?, as such terms are defined in, and all in accordance with, the Agreement (Grand Central Properties and Grand Central Commons being referred to as the "Owner" or "Owners'? The Notes shaJ/ be dated August 1, 2008, shall mature no later than February 1, 2014, and shall bear interest at the rate of 6.0 % per annum from the date of original issue of the Note. The Notes are issued in consideration of payment by Grand Central Properties of the Public Redevelopment Costs in at least the principal amount of the Notes, in accordance with the Agreement. Section 2. Form of Note. The Notes shall be in substantially the following form, numbered R-1 and R-2, with the blanks to be properly filled in as of the date of issue: UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No.R-_ $ TAXABLE TAX INCREMENT REVENUE NOTE SERIES 2007 Rate Date of Oriainallssue 6.0% August 1, 2008 The Columbia Heights Economic Development Authority ("Authority'! for value received, certifies that it is indebted and hereby promises to pay to or registered assigns (the "Owner'?, the principal sum of $ (the "Principal Amount", as provided in the Agreement defined hereafter, together with interest on the unpaid balance thereof accrued from the date of original issue hereof at the rate of 6.0 percent per annum (the "Stated Rate'? This Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer and New Heights Development, LLC dated as of September 22, 2004, as amended by a First Amendment thereto dated as of April 26, 2005, a Second Amendment thereto dated as of November 22, 2005, a Third Amendment thereto dated as of August 28, 2007 and a Fourth Amendment thereto dated as of , 2008 (the ''Agreement'? and the authorizing resolution (the "Resolution'? duly adopted by the Authority on August , 2008. Capitalized terms used and not otherwise defined herein have the meaning provided for such terms in the Agreement unless the context clearly requires otherwise. 1. Pavments. Principal and interest ("Payments'? shall be paid in installments commencing February 1, 2009 and continuing on each February 1 and August 1 thereafter to and including February 1, 2014 ("Payment Dates'?, in the amounts and from the sources set forth in Section 3 herein. Payments shaH be applied first to accrued interest, and then to unpaid principal. Notwithstanding anything to the contrary herein, the balance of [Housing Redeveloper Available Tax Increment) [Commercial Redeveloper Available Tax Increment} on hand as of the date of issuance of the Note shall be paid on the date of issuance. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Simple interest shall accrue from the date of original issue of this Note and shaff be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3. Available Tax Increment. [All payments on this Note are payable on e8cl1 Payment Date solely from and in the amount of the "Housing Redeveloper A vaiJable Tax Increment" as defined in the Agreement that has been paid to the Authority by Anoka County in the six months preceding the Payment Date, subject to the withholding and contingent pledge of certain Tax Increment held in escrow by the Authon.ty in accordance with Section 3.4(e)(I) of the Agreement} Economic Development Authority Meeting Minutes September 23, 2008 Page 5 of 10 [All payments on this Note are payable on each Payment Date solely from and in the amount of the "Commercial Redeveloper Available Tax Increment" as defined in the Agreement that has been paid to the Authority by Anoka County in the six months preceding the Payment Date.} The Authority shaJJ have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than [Housing Redeveloper Available Tax Increment] (Commercial Redeveloper Available Tax Increment] and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of such pledged revenues. The Authority shaff have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final Payment on February 1, 2014. 4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 of the Agreement, the terms of which are incorporated herein by reference. 5. ODtional PreDavment. (a) The principal sum and aI/accrued interest payable under this Note isprepayable in whole or in parl at any time by the Authority without premium or penalty. No parlial prepayment shaff affect the amount or timing of any other regular payment othelWise required to be made under this Note. (b) Upon receipt by Redeveloperofthe Authority's written statement of the Excess Amount as defined in Section 3.4(c) of the Agreement, oneMhalf of such Excess Amount wiJJ be deemed to constitute, and will be applied to, prepayment of the principal amount of this Note. Such deemed prepayment is effective as of the Final Closing Date as defined in Section 3A(c) of the Agreement, and will be recorded by the Registrar in its records for the Note. Upon request of the Owner, the Authority will deliver to the Owner a statement of the outstanding principal balance of the Note after application of the deemed prepayment under this paragraph. 6. Nature of Obliaation. This Note is one of an issue in the total principal amount of $700, 000 issued to aid in financing cerlain pUblic redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to the Resolution, and pursuant to and in ful/ conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179. This Note is a limited obligation of the Authority which is payable solely from the revenues pledged to the payment hereof under the Resolution, each Note issued under the Resolution being on parity with the other. This Note and the interest hereon shaff not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, norany political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except from and to the extent of the revenues pledged hereto, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Reaistration and Transfer. This Note is issuable only as a fuJJy registered note without coupons. As provided in the Resolution, and subject to cerlain limitations set forlh therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Finance Director, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shaJJ not be transferred to any person unless the Authority has been provided with an opinion of counselor a cerlificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. tT IS HEREBY CERTIFIED AND RECITED that alf acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding /imitedobligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director-Walter R. Fehst PresidentMGary L. Peterson REGISTRA TlON PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Finance Director, in the name of the person last listed below. Date of Signature of Economic Development Authority Meeting Minutes September 23, 2008 Page 6 of 10 Registration Registered Owner _ City Finance Director Federal Tax 1.0 No. Section 3. Terms. Execution and Deliverv. 3.01. Denomination. Pavment. The Note shall be issued as a single typewritten note numbered R-1. The Note shall be issuable only in fully registered form. Principal of and interest on tile Note shall be payable by check or draft issued by tile Registrar described herein. 3.02. Dates: Interest pavment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Reaistration. The Authority hereby appoints the City Finance Director to perform the functions of registrar, transfer agent and paying agent (the "Registrar). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Reaister. The Registrar shall keep at its office a bond register in which the Registrar shalf provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shaJJ not be transferred to any person unless the Authority has been provided with an opinion of counselor a cerlificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) CanceJJation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by tl1e Authority. (d) Imoraaer or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owners order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to tl1e extent of the sum or sums so paid. (f) Taxes. Fees and Charaes. For every transfer or excl1ange of the Note, tl1e Registrar may impose a cl1arge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated. Lost Stolen or Destroved Note. In case any Note shall become mutilated orbe lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of sucl1 cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preoaration and Deliverv. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall neverlheless be valid and sufficient for all purposes, tl1e same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Securitv Provisions. Economic Development Authority Meeting Minutes September 23,2008 Page 7 of 10 4.01. Pledae. The Authority hereby pledges to the payment of the principal of and interest on the Notes all Housing Redeveloper Available Tax Increment and Commercial Redeveloper Available Tax Increment, as the case may be, under the terms and as defined in the Notes. Such revenues shall be applied to payment of the principal of and interest on the Notes, each Note being on parity with the other, in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereofor interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year all Housing Redeveloper Available Tax Increment and Commercial Redeveloper Available Tax Increment; and agrees with respect to the Note issued to Grand Central Properties, to maintain and apply the escrowed Tax Increment in accordance with Section 3.4(c)(i) of the Agreement. Any amount remaining in the Bond Fund shall be transferred to the Authority's account for the TlF District upon termination of the Note in accordance with its terms. 4.03. Additional Bonds. If the Authority issues any bonds or notes secured by Available Tax Increment, such additional bonds or notes are subordinate to the Notes in all respects. Section 5. Certification of Proceedinas. 5.01. Certification of Proceedinas. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shalf be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon execution of the Fourth Amendment to the Agreement. RESOLUTION NO. 2008-13 RESOLUTION APPROVING CONTRACT FOR PRIVA TE REDEVELOPMENT AND RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $440,000 TAXABLE TAX INCREMENT REVENUE NOTE, SERIES 2008B BE IT RESOL VED BY the Board of Commissioners ("Board) of tile Columbia Heights Economic Development Authority, Columbia Heights, Minnesota (the "Authority') as follows: Section 1. Authorization. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the Kmart/Central Avenue Tax Increment Financing District (the "TIF District'j the Downtown CBD Redevelopment Project (the "Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from alf or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Increment Revenue Note in the maximum principal amount of$440,000 (the "Note') for the purpose of financing certain public redevelopment costs of the Project. 1.02. Aooroval of Aareement. The Contract for Private Redevelopment (the "Agreement') between the Authority Grand Central Commons, LLC ("Grand Central Properties') is approved in substantially the form on file in City Hall, subject to modifications that do not alter the substance of the transaction that are approved by the President and Executive Director, provided that execution of tile amendment by such officials is conclusive evidence of and their approval. ' 1.03. Issuance, Sale, and Terms of the Note. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with the Agreement. The Note shall be issued to Grand Central Commons LLC ("Owner;. The Note shall be dated as of the date of delivery, shall mature no later than February 1, 2018 and shall bear interest at tile rate of 7.0% per annum from the date of original issue of the Note. The Note is issued in consideration of payment by Ownerofcertain Public Redevelopment Costs in at least the principa/amount of the Note, in accordance with the Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No. R-1 $ Economic Development Authority Meeting Minutes September 23, 2008 Page 8 of 10 TAXABLE TAX INCREMENT REVENUE NOTE SERIES 20_ Rate Date of Oriainallssue 7.0% .20 The Columbia Heights Economic Development Authority ("Authority'? for value received, certifies that it is indebted and hereby promises to pay to Grand Central Commons LLC or registered assigns (the "Owner'?, the principal sum of$ or so much thereof as has been from time to time advanced (the "Principal Amount'?, as provided in the Agreement defined hereafter, together with interest on the unpaid balance thereof accrued from the date of original issue hereof at the rate of_percent per annum (the "Stated Rate'? This Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer and the Owner dated as of , 2008 (the "Agreement'? and the authorizing resolution (the "Resolution'? duly adopted by the Authority on ,2008. Capitalized terms used and not otherwise defined herein have the meaning provided for such terms in the Agreement unless the context clearly requires otherwise. I. Pavments. Principal and interest ("Payments'? shall be paid on August 1, 2010 and each Febru8lY 1 and August 1 thereafter to and including February 1, 2021 ("Payment Dates'? in the amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest Interest accruing from the date of original issue through and including February 1, 2010 (and not othelWise paid from A vailable Tax Increment) will be compounded semiannually on February 1 and August 1 of each year and added to principal. Interest shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3. Available Tax Increment. AfJ payments on this Note are payable on each Payment Date solely from and in the amount of the "Available Tax Increment, JJ which means, on each Payment Date, 90 percent of the Tax Increment attributable to the Commercial Properly as defined in the Agreement that is paid to the Authority by Anoka County in the six months preceding the Payment Dale. The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of such pledged revenues. The Authority shall have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final Payment on February 1, 2021 4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 of the Agreement, the terms of which are incorporated herein by reference. 5. OoUonal Preoavment. (a) The principal sum and all accrued interest payable under this Note is prepayable in whole or in parl at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Note. (b) Upon receipt by Redeveloperofthe Authority's written statement of the Excess Amount as defined in Section 3.4(e) of the Agreement, one-half of such Excess Amount will be deemed to constitute, and will be applied to, prepayment of the principal amount of this Note. Such deemed prepayment is effective as of the Calculation Date as defined in Section 3.4(e) of the Agreement, and will be recorded by the Registrar in its records for the Note. Upon request of the Owner, the Authority will deliver to the Owner a statement of the outstanding principal balance of the Note after application of the deemed prepayment under this paragraph. 6. Nature of Obliaation. This Note is one of an issue in the total principal amount of $ issued to aid in financing cerlain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to the Resolution, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179. This Note is a limited obligation of the Authority which is payable safely from the revenues pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be Obligated to pay the principal of or interest on this Note or other costs incident hereto except from and to the extent of the revenues pledged hereto, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Reaistration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to cerlain /imitations set forlh therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Chief Financial Officer, by the Owner hereof in person or by such Owner's attorney duly Economic Devclopmcnt Authority Meeting Minutes September 23, 2008 Page 9 of 10 authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements offederal and applicable state securities laws. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners ofthe Columbia Heights Economic Development Authority have caused this Note to be executed will1 the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director-Walter R. Fehst President-Gary L. Peterson REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Chief Financial Officer, in the name of the person last listed below. Date of Registered Owner _ Signature of Registration City Chief Financial Officer Grand Central Commons LLC Federal Tax 1.0. No. Section 3. Terms Execution and DelivetV. 3.01. Denomination. Pavment. The Note shaff be issued as a single typewritten note numbered RM1. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates' Interest Pavment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Reaistration. The Authority hereby appoints the City Chief Financial Officer to perform the functions of registrar, transfer agent and paying agent (the "Registrar'1. The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Reaister. TI1e Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancel/ed by the Registrar and thereafter disposed of as directed by the Authority. (d) Imorover or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. Economic Development Authority Meeting Minutes September 23,2008 Page 10 of 10 The Registrar shall incur no liability for its refusa', in good faith, to make transfers, which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for afl other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes. Fees and Charaes. For every transfer or exchange of the Note, the Registrar may impose a c/7arge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated Lost Stolen or Desfroved Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to if that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shaf/ be named as obligees. The Note so surrendered to the Registrar shalf be cancelled by it and evidence of such cancellation shaf/ be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preoaration and Deliverv. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shalf cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Securitv Provisions. 4.01. Pledae. The Authority }7ereby pledges to the payment of the principal of and interest on the Note all Available Tax Increment under the terms and as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal t/7ereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year all A vailabfe Tax Increment. Any A vailable Tax Increment remaining in the Bond Fund shalf be transferred to the Authority's account for the T1F District upon termination of the Note in accordance with its terms. 4.03. Additional Bonds. If the Authority issues any bonds or notes secured by Available Tax Increment, such additional bonds or notes are subordinate to the Note in all respects. Section 5. Cerlification of Proceedinos. 5.01. Cerlificafion of Proceedinas. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, cerlificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as othelWise known to them, and all such cerlified copies, certificates, and affidavits, including any heretofore furnished, shalf be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon execution of the Agreement. ADJOURNMENT President, Peterson, adjourned the rneeting at 7:50 p.rn. s~ Scott Clark \ H :\EDArn i nutes2008\9-23-2008 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of January 27, 2009 AGENDA SECTION: Consent Agenda ORIGINATING EXECUTIVE NO: 4 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 2009-01, Financial BY: Cher Bakken BY: Report and Payment of Bills DATE: January 20, 2009 BACKGROUND: The bound Financial Report for the months of September, October, November and December 2008 draft Resolution 2009-01 is attached for review. The enclosed Financial Report lists the Summary (white), the Check History (Green), the Expenditure Guideline with Detail (blue) and Revenue Guideline with detail (yellow) for each fund. The reports cover the activity in the calendar (fiscal) year from January 1 through December, 2008. RECOMMENDATION: Staff will be available to answer specific questions. If the report is satisfactorily complete, we recommend the Board take affirmative action to receive the Financial Report and approve the payment of bills. RECOMMENDED MOTION: Move to waive the reading of Resolution 2009-01, there being an ample amount of copies available to the public. Move to approve Resolution 2009-01, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the Financial Statement and Payment of Bills for the months of September, October, November and December 2008. EDA ACTION: H:\EDAConsenI2009\Sepl, Ocl, Nov, Dec. Fin Rep 2008 EDA RESOLUTION 2009-01 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR SEPTEMBER, OCTOBER, NOVEMBER AND DECEMBER 2008 AND PAYMENT OF BillS FOR THE MONTHS OF SEPTEMBER, OCTOBER, NOVEMBER AND DECEMBER 2008. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the months of September, October, November and December 2008 and the list of bills for the months of September, October, November and December 2008 are attached hereto and made a part of this resolution; and WHEREAS, the EDA has examined the financial statement and the list of bills and finds them to be acceptable as to both form and accuracy. NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the attached financial statements and list of bills, which are attached hereto and made a part hereof, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the list of bills as presented in writing are approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution and attachments are to be made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this _ day of ,2009. MOTION BY: SECONDED BY: AYES: NAYS: President Attest by: Cheryl Bakken, Assistant Secretary H:\Resolutions2009\EDA2009-01 fin Sept, Oct, Nov., Dec. 2008 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Meetinq of January 27, 2009 AGENDA SECTION: Business Items ORIGINATING DEPARTMENT: EXECUTIVE NO: 5 Community Development DIRECTOR APPROVAL ITEM: Adopt Resolution 2009-02, Approving BY: Sheila Cartney BY: funding for the Rehab Incentive Program DATE: January 21,2009 and the Single-Family Home Deferred Loan Program (SFHD). Introduction Staff requests that the Columbia Heights Economic Development Authority (EDA) authorize $50,000 of funding for the Columbia Heights Rehab Incentive Program and $35,000 for the new Single-Family Home Deferred Loan Program (SFHD). Both programs are included in the Housing Maintenance Plan 2008 - 2017, approved by the EDA on August 18, 2007. The Greater Metropolitan Housing Corporation (GMHC) administers the programs for the City and will continue to do so, based on EDA action regarding the same. Rehab Incentive Program The Columbia Heights Rehab Incentive Program is designed to assist homeowners in the City in maintaining and improving their homes by providing a rebate to homeowners after an improvement has been completed. The upgrades foster a stabilization and revitalization of the City's housing stock. Homeowners of single-family or owner-occupied duplexes with a household income at 115% of the area median income or less are eligible to apply. Calculated as a percentage of total construction costs, a rebate payment of 10%, 12% or 15% may be granted, up to $3,000. Examples of eligible improvements include repairing or replacing dilapidated porches, roofs, retaining walls, siding, exterior steps or railings and heating, plumbing or electrical systems. Single-Family Home Deferred Loan Program (SFHD) The purpose of the Single-Family Home Deferred Loan Program (SFHD) is to provide no- or low- interest loans to homeowners of lower income to complete structural improvements that would help maintain the quality of their homes and the City's housing stock. Assistance is targeted at homeowners who need to perform home maintenance, but who may not be able to pay a monthly debt service of a conventional loan. The SFHD would provide half of the total project costs, or up to $7,500, in a deferred loan to homeowners making 80% of the median area income or less. To qualify for the program, the homeowner must provide matching funds for the remaining project costs. Home equity loans or an MHFA loan qualify as matching funds. Exterior home improvements related to health and safety, code violations or energy efficiency, such as windows, siding and roofs would be eligible. Repayment of the loan, plus simple interest of two percent, will be required upon sale of the house or transfer of title. The homeowner can use the proceeds from the sale of the house to pay the loan. Repaid loans will be returned to the funds available to finance future loans. A lien applied to the property ensures that the loan will be repaid. Recommendation: Staff recommends the EDA fund the Rehabilitation Incentive Program in the amount of $50,000 and the Single-Family Home Deferred Loan in the amount of $35,000 from Fund 408 - EDA Housing Maintenance Programs. Staff is recommending a small increase in each fund due to past success of these programs. Fund 408 has a cash balance of $231,576, and receivable of $600,000. Recommended Motion: Move to waive the reading of Resolution 2009-02, there being an ample amount of copies available. Move to Adopt Resolution 2009-02, a Resolution Approving funding for the Rehab Incentive Program in the amount of $50,000 and the Single-Family Home Deferred Loan Program (SFHD) in the amount of $35,000 to the Greater Metropolitan Housing Corporation (GMHC) from Fund 408 - EDA Housing Maintenance Programs. Attachments: Resolution, Monthly status reports EDA ACTION: EDA RESOLUTION NO. 2009-02 A RESOLUTION APPROVING FUNDING FOR THE REHAB INCENTIVE PROGRAM ($50,000) AND THE SINGLE-FAMILY HOME DEFERRED LOAN PROGRAM (SFHD) ($35,000) TO THE GREATER METROPOLITAN HOUSING CORPORATION (GMHC) WHEREAS, the Columbia Heights Economic Development Authority (EDA) through its Comprehensive Plan has established as a goal the preservation of the single-family housing stock. WHEREAS, the EDA approved the Housing Maintenance Plan 2008-2017 to improve and maintain the residential homestead housing stock. WHEREAS, the Greater Metropolitan Housing Corporation has agreed to provide consulting services. WHEREAS, the Greater Metropolitan Housing Corporation has provided housing preservation services since 2002. THEREFORE, BE IT RESOLVED, that the EDA allocates $50,000 for the Rehab Incentive Program and $35,000 for the Single-Family Home Deferred Loan Program to the Greater Metropolitan Housing Corporation from Fund 408 - EDA Housing Maintenance Funding. Passed this day of ,2009. Offered by: Seconded by: Roll Cali: President- Walter R. Fehst, Executive Director HousingResource Center - Northeast City of Colum~ia Hei hts Monthlv Status Reoort - End of December 2008 MHFA Rehab Incen<lve t'rogram - 1---- Program Pool: $45,000,00_ AQQlic~tionssentthismonth: ___ -.- 0 ~_____t-_,_ Applications given out at 2005 Columbia Heights Fair 51 __ Applications received: 0 Applications in process: 0 Rebates dosed to date: 32 Iotal project cost: $453,871.83 Total rebate funds given this month: __ $0.00 Total rebate funds given to date: <I; 45000.00 Total pro'gram funds remaining in --;;001: #REF! I I * MHFA FIX Un Fund TotaJJoan funds gjven this month __ OFfOtalloans funds given to date Pro. eet Address Rebate Pro. eet Cost Pro' eet * 4218 2nd St. NE <582.50 <5825.00 basement finishinn 4044 5lh 51. NE 912.84 <7607.00 Windows * 3960 Cleveland Ave. <1:3000.00 $25207.00 Drivewall fence 1036 42nd Ave. NE <823.90 $8 239.00 Stucco * 120140th Ave. NE $2685.33 22377.77 bathroom refinishina 4323 6th 51. NE <1 104.43 13 910.00 Garaoe reolacement !j:n~~~i~~~!~~~~Ne~"y 7{~i~~ !y ~~!~:~i~~ :~:::: 4138 Jefferson 51. NE <1790,00 $17900,00 balhroom refinishin" 4717 Unland Crest ~1 545.00 $10300.00 5iddin" 4244 7th 5t NE <170.00 <1700.00 eoress window 1010 43rd Ave. NE 350.00 <3 500.00 windows # 1036 Gould Ave. NE <3000.00 $66977.28 General remodelin" 5200 6th 51. NE ~1870.00 $18700.00 Windows 5015 Johnson 51. NE <2 256.50 <22 565.00 windows/oaraoe add 4441 2nd 51. NE 460.80 <3840.00 HAVC 805 50th Ave. Ne <1725.00 $17250.00 bathroom remodel 5250 Washin"ton 51. NE T3 000.00 $27 213.52 General remodelinn *422S Jefferson St. NE <1743.60 <14530.00 Windows/Roof 4854 Monroe 51. NE <1 477.50 <9850.00 Drivewav 4419 Madison 51. NE <667.50 $6675.00 Furnace/Gara"e 3817 Buchanan 51. NE Q 509.22 $25092.29 Floors *4232 6th Street NE <1044.00 <8700.00 Windows *938421/2 Avenue NE; t!S"0l009;;!; $o.OO"lleneral'femddelln;;,' 4957 Jefferson 51. NE <478.80 3 990.00 Reroof House 3705 Van Buren 51. NE T3 000.00 29 067.00 Enclosed Porch 3857 nuinc:v 51. NE <3000.00 31000.00 Garaoe f;,! "f'oSI95'(00f'" 13'300(00;"; " ~e,rrace",...,...~16~:,~og~.,!..g.;, ~"NEi;";;:;''''~'235'97':'' Closin 8/1402 9/402 9402 9/19/02 10 9/02 1015/02 11 18 02 2502" " 2 17 03 3 10 03 3 20 03 3 24 03 4203 4803 423 03 5 15 03 5 19 03 53003 6 17 03 7 15 03 7703 7803 7 11/03 814/03 4 12/2005 5711/2005 6 2/2005 "",,' /7/05' .,.. Gen Remodel/Plumblnn 6 15/05 ~;or.;~e~~:~i:ri~~ ~7/05)d;' Total <45 000.00 $453 871.83 MHFA Particinants 4605 7th Street NE 3850 Jackson 51. NE 1434 42nd Ave, NE 43354th 51. NE 1493 Lincoln Terrace 3731 Quincv 51. NE 1493 Lincoln Terrace 4212 6th 51. NE. 4059 4th 51. NE. 4156 5th 5t.JJS_., 0,00 0,00 0.00 0.00 <0.00 $0.00 $0.00 $0.00 11 668.60 General remodelinn 12 115.00 Bathroom Remodel 12 103.00 Windows/Heatino $23 288.64 Garaoe/Gen Remodel $25 902.55 Kitchen Remodel $34673,00 Gen Remodel/Gara"e <1;30 156,07 lumbinn/Gen Remodel 6 150.00 Sidino 2900.00 Fuenace/AC $15,715.63 Siding/Mise Renairs 10 28/03 51704 S 26 04 71204 726 04 10 26 04 6 15/05 10 24/05 11 18/05 12/13/05 $6,138.88 $329,095,43 Status Comnleted Com leled Comoleted Comnleted Comnleted Com leted Comoleted "l3utof'pr66ram' "'" Comnleted Comoleted Comnleted Comnleted Comnleted Comoleted Comoleted Comnleted Comnleted Comoleled Comoleted Comnleted Comoleted Comoleted Comnleted Comnleted Comoleted Comnleted Comnleted I' ~ RBO/o 10 12 12 10 12 15 12 --e-- 1 2 3 4 5 6 7 15 10 15 10 10 15 10 10 10 10 12 12 15 10 10 12 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 '.'25" " 26 27 28 ,:,.'''29 ' 30 ;>..31". , ;WF32:;i\;T0 12 12 12 12 0% 0% 0% 0% 0% 0% 0% --- Special Notice: Some of this Information portrayed in this report consist of "Private Data" as defined by the Minnesota Government Data Pratices Act. This list/report MUST NOT be reproduced and/or distributed 1(0 Total loan funds aiven to date has been ad1usted bV=t207. A total nroiect cost of $25207.00 was added to total loan funds when the loan was actuallv :1;25 000.00 I I I I "'Y 01 ,-,0 U,ll elgms tenao ncentlve t-'rogram End of September 2007 ....J, <-~~ Greater Metropolitan Housing Corporation City of Columbia Heights - Deferred Loan Program September 30, 2008 Amount Deferred Loan Pool: $30,643.00 (Funds Held @ GMHC) 1 04/07/08 White, Christopher & Stacy 4146 Wahington St NE 3,122.00 2 OS/28/08 Palmer, Ryan M. 4932 6th St NE 2,838.50 $5,960.50 7/1612008 3 07/22/08 Modahl, Aaron J. 1019 Gould Ave NE 7,500.00 4 07/23/08 Lewis, Glenna M. 4456 Monroe St NE 7,500.00 5 07/31/08 Sheehan, Susan E. 4816 5th SI NE 3,905.00 6 09/23/08 Montague, Lynette 3930 Tyler St NE 5,777.50 $24,682.50 9/30/2008 Total Closed Loans: $30,643.00 $30,643.00, Total Billings Deferred Loan Pool Balance: $0.00 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meetina of January 27, 2009 EXECUTIVE AGENDA SECTION: Business Items ORIG.DEPARTMENT DIRECTOR NO.6 Community Development APPROVAL BY: ITEM: Adopt Resolution 2009-03, BY: Sheila Cartney Consultant Services Agreement with the DATE: January 21, 2009 Greater Metropolitan Housing Corporation BACKGROUND: Since 2002, the EDA has partnered with the Greater Metropoiitan Housing Corporation (GMHC) and its HousingResource Center to provide the residents of Columbia Heights with a variety of housing services to help maintain and improve their homes. The services provided are of great value to residents, as they have access through the organization to information on such issues as home rehabilitation or mortgage foreclosure prevention, and can receive construction consultation services. In addition, residents can access home rehabilitation funds through MHFA Fix-Up Fund loan, the City's Rehab Incentive Fund or the City's Single- Family Home Deferred Loan Program. The complete list of services is listed in section 1. Scope of Services in the attached Consultant Services Agreement. Staff recommends the EDA enter into an agreement with the HousingResource Center at a cost of $15,000 for the year 2009. The $15,000 annual fee gives residents access at no cost to the services of GMHC's HousingResource Center, where they can receive information on nearly any topic related to housing and construction consultation, as well as apply for GMHC-administered programs, such as the Fix-Up Fund, the Columbia Heights Rehab Incentive Program or the new Single-Family Home Deferred Loan Program. Funding is available from Fund 408 - EDA Housing Maintenance Fund. The Consultant Services Agreement begins 1/1/2009 and ends 12/31/2009 and can be terminated by either party with 30 days' notices. See attached agreement for further details. RECOMMENDATION: Staff recommends Adoption of Resolution 2009-03 approving the 2009 Consultant Services Agreement with the Greater Metropolitan Housing Corporation (GMHC), and appropriating $15,000 from Fund 408 -EDA Housing Maintenance Fund for the same. RECOMMENDED MOTION: Move to waive the reading of Resolution 2009-03, there being an ample amount of copies available. Move to Adopt Resolution 2009-03, a Resolution approving the 2009 Consultant Services Agreement with the Greater Metropolitan Housing Corporation (GMHC), and appropriating $15,000 from Fund 408 -EDA Housing Maintenance Fund for the same; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Attachments: Resolution, Consultant Services Anreement EDA ACTION: EDA RESOLUTION NO. 2009-03 A RESOLUTION APPROVING THE 2009 CONSULTANT SERVICES AGREEMENT WITH THE GREATER METROPOLITAN HOUSING CORPORATION (GMHC) AND APPROPRIATING $15,000 FROM FUND 408 - EDA HOUSING MAINTENANCE FUND FOR THE SAME. WHEREAS, the Greater Metropolitan Housing Corporation (GMHC) has agreed to provide consulting services. WHEREAS, the Columbia Heights Economic Development Authority through its Comprehensive Plan has established as a goal the preservation of the single-family housing stock. WHEREAS, the Greater Metropolitan Housing Corporation has provided housing preservation services since 2002. WHEREAS, the residents have found these services to be a significant assistance to help preserve and maintain their homes. THEREFORE, BE IT RESOLVED, that the EDA approves the 2009 Consultant Services Agreement with the Greater Metropolitan Housing Corporation and appropriates $15,000 from Fund 408 - EDA Housing Maintenance Fund for the same. Passed this day of ,2009 Offered by: Seconded by: Roll Call: President- Walter R. Fehst, Executive Director CONSULTANT SERVICES AGREEMENT THIS IS AN AGREEMENT entered into the _ day of ,200_, by and between the Columbia Heights Economic Development Authority, ("EDA"), and GREATER METROPOLITAN HOUSING CORPORATION, a Minnesota non-profit corporation ("Consultant"). RECITALS A. The Consultant has a division called The Housing Resource Center ("HRC"). GMHC has agreed to provide certain Services through HRC (as defined below) in connection with the EDA's housing program. B. The EDA desires to hire the Consultant to render this technical, professional, and marketing assistance in connection with housing programs in the EDA for the term as set forth in this Agreement. C. Consultant is willing to provide such services on the terms and conditions set forth herein. In consideration of the foregoing recitals and following terms, conditions and mutual promises contained herein, the parties agree as follows: I. Scope of Services. The Consultant shall provide services as follows (the "Services"): a. Administer the following home improvement programs for residents of the City of Columbia (the "City"): MHFA Fix Up Fnnd, Community Fix Up Fund, and the MHF A Rental Rehab Program (collectively the "MHF A Programs"); City of Columbia Heights Rebate Incentive Program and City of Columbia Heights Single-Family Deferred Program: I. Providing information to residents and property owners about the programs, upon request; assisting the City with marketing materials through various mediums; 2. Assist the EDA in developing procedures for the programs; 3. Receipt of applications from residents; 4. Processing applications; 5. Closing loans to qualified applicants in accordance with the applicable program; 6. Overseeing the draw process for the funds, including, as necessary, reviewing draws, reviewing the progress of the work and collecting lien waivers and certificates of occupancy. Consultant may, for this purpose, rely on third-party representations and certifications. 7. Provide monthly reports about the number of loans closed and the balance in each loan program. fb.us.3166730.04 1 b. Assist City residents considering rehabilitation, including propelty visits, meet with homeowners and potential contractors, suggest alternatives for rehabilitation to homeowners, educate homeowners on the construction bid process, assist homeowners to evaluate bids and work completed and constmction progress. c. Provide housing information to City residents, including information on emergency assistance, housing rehabilitation, first time homebuyers and limited rental information; d. Assist the EDA in developing programs to purchase and rehabilitate homes; e. Coordinate these services out of Consultant's Northeast office; and f. Have Consultant's staff visit residences as determined necessary by Consultant. 2. Term. This Agreement shall be in full force and effect from January 1,2009 and shall continue through December 31, 2009, unless otherwise terminated as set forth below. 3. Compensation. For services provided under this Agreement, the EDA shall pay to the Consultant Fifteen Thousand Dollars ($15,000.00) within thirty (30) days after execution of this Agreement. The Consultant shall receive compensation for administering the MHF A Programs directly from the Minnesota Housing Finance Agency and not fi'om the EDA. 4. Termination. Notwithstanding any other provision hereof to the contrary, this Agreement may be terminated as follows: a. The parties, by mutual written agreement, may terminate this Agreement at any time in which case the parties shall agree to the amount of fees payable to Consultant. b. EDA may terminate this Agreement upon the breach by Consultant of any of its material covenants contained herein, where such breach shall have continued for a period of thirty (30) days following the receipt by Consultant of a written notice fi'om EDA, specifying the alleged breach; provided, however, if the nature of a non-monetary breach is such that Consultant cannot reasonably cure same in the thirty (30) day period, Consultant shall not be deemed to be in breach if it commences to cure within the thirty (30) day period, and diligently pursues same to completion within ninety (90) days following receipt by Consultant of such written notice. In the event of termination by EDA hereunder, Consultant shall be entitled to fees due to the date the notice of breach is sent by the EDA. c. If Consultant or EDA (as applicable) (i) files a voluntary petition in bankruptcy (ii) files a voluntary petition for reorganization under any bankmptcy law, statute fb.\~.3166730,04 2 or regulation or other similar statute or regulation, (iii) is adjudicated a bankrupt, (iv) makes an assignment for the benefit of creditors or applies for or consents to the appointment of a receiver or trustee as part of or in conjunction with a "creditor plan" with respect to any substantial patt of its assets, or (v) a receiver or tmstee is appointed, or an attachment or execution levied with respect to any substantial part of its assets, and said appointment is not vacated, or the attachment or execution not released, within sixty (60) days, then this Agreement shall, effective as of such date, without notice or further action by either party, immediately terminate. d. Consultant may terminate this Agreement upon the breach by EDA of any of its material covenants contained herein, where such breach shall have continued for a period of thirty (30) days following the receipt by EDA of a written notice from Consultant, specifying the alleged breach; provided, however, if the nature of a non-monetary breach is such that EDA cannot reasonably cure satne in the thirty (30) day period, EDA shall not be deemed to be in breach if it commences to cme within the thirty (30) day period, and diligently pursues satne to completion within ninety (90) days following receipt by EDA of such written notice. In the event of termination by Consultant hereunder. Consultant shall be entitled to retain the entire fee under this Agreement. S. Insurance. a. During the term of this Agreement, the Consultant shall obtain and maintain workers compensation, comprehensive general liability, and automobile liability insurance. Comprehensive general liability insurance shall have an aggregate limit ofTwo Million Dollars ($2,000,000.00). b. Upon request by the EDA, the Consultant shall provide a certificate or certificates of insurance relating to the insurance required. Such insurance secured by the Contractor shall be issued by insurance companies licensed in Minnesota. The insurance specified may be in a policy or policies of insurance, primary or excess. c. Such insurance shall be in force on the date of execution of an Agreement and shall remain continuously in force for the duration of the Agreement. 6. Indemnification. a. Notwithstanding anything to the contrary in this Agreement, the EDA, its officers, agents, and employees shall not' be liable or responsible in any manner to the Consultant, the Consultant's successors or assigns, the Consultant's subcontractors, or to any other person or persons for any third party claim, demand, datnage, or cause of action of any kind, nature, or character, including intentional acts, arising out of or by reason of the performance of this Agreement by Consultant. The Consultant, and the Consultant's successors or assigns, agree to protect, defend and save the EDA, and its officers, agents, and employees, harmless from all third party fb.us.3166730.04 3 claims, demands, damages, and causes of action, to the extent caused by the negligence or wrongful acts of Consultant, and the costs, disbursements, and expenses of defending the same, including but not limited to, attorneys fees, consulting services, and other technical, administrative or professional assistance. b. Nothing in this Agreement shall constitute a waiver or limitation of any immunity or limitation of any immunity or limitation on liability to which the EDA is entitled under Minnesota Statutes, Chapter 466, or otherwise. 7. Assil!.nment. This Agreement shall not be assigned, sublet, or transferred, in whole or in part without the prior written approval of the EDA. 8. Conflict of Interest. The Independent Contractor shall use best efforts to meet all professional obligations to avoid conflicts of interest and appearances of impropriety in representation of the EDA. In the event of a conflict, the Independent Contractor, with the prior written consent of the EDA, shall arrange for suitable alternative services. 9. ComDliance with Laws. The Consultant shall comply with all applicable Federal, State, and local laws, rules, ordinances, and regulations at all times and in the performance of the services pursuant to this Agreement. 10. Notices. Any notices permitted or required by this Agreement shall be deemed given when personally delivered or upon deposit in the United States mail, postage fully prepaid, certified, return receipt requested, addressed to: Consultant: Greater Metropolitan Housing Corporation 15 South 5th Street, Suite 710 Minneapolis, MN 55402 ATTN: Suzarme Snyder EDA: Columbia Heights Economic Development Authority 590 40th Avenue NE Columbia Heights, MN 55421 Or such other address as either party may provide to the other by notice given in accordance with this provision. 11. Entire Al!.reement. This Agreement, any attached exhibits and any addenda or amendments signed by the parties shall constitute the entire agreement between the EDA and the Consultant, and supersedes any other written or oral agreements between the EDA and the Consultant. This Agreement can only be modified in writing signed by the EDA and the Consultant. 12. Third Party Ril!.hts. The parties to this Agreement do not intend to confer on any third party any rights under this Agreement. fb.us.3166730.04 4 13. Counterparts. This Agreement may be signed in one or more counterparts but all of which taken together shall constitute one instrument. 14. Choice of Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. 15. Aereement Not Exclusive. The EDA retains the right to hire other housing program consultants, in the EDA's sole discretion. 16. Data Practices Act Compliance. Data provided to the Consultant or created by the Consultant under this Agreement shall be administered in accordance with the Minnesota Government Data Practices Act, Minnesota Statutes, Chapter 13, as amended. IN WITNESS WHEREOF, the parties hereto have executed, or caused to be executed by their duly authorized officials, this Agreement on the respective dates indicated below. [Signature Page Follows] fb.us.3166730.04 5 EDA: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By: Its: President -Gary L, Peterson ,200 , Date: By: Its: Executive Director -Walter R, Fehst Date: ,200_, CONSULTANT: GREATER METROPOLITAN HOUSING CORPORATION By: Its: President Date: ,200_, fb.\1S.3166730.04 6 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Meeting of: January 27,2009 AGENDA SECTION: Business Items ORIGINATING DEPARTMENT: Executive NO.7 Community Development Director Approval ITEM: Adopt Resolution 2009-05, BY: Sheila Cartney BY: GHMC requesting additional DATE: January 9, 2009 financial assistance for property located at 3805 2nd Street BACKGROUND: On November 27,2007 the EDA entered into an agreement with Greater Metropolitan Housing Corporation (GMHC) for the redevelopment of the residential property located at 3805 2nd Street. At that time the property contained one single-family house on a double lot. As part of the agreement GMHC was to demolish the house and redevelop the site with two new single-family homes; with financial assistance from the EDA. The EDA agreed to provide $86,647 in funding to make this project feasible for GMHC. The $86,647 was obligated through the Anoka County HRA levy. The target sales price for the homes was $235,000 each. To date the existing house has been demolished and no further activity has taken place on the site. GMHC is requesting the EDA to increase the funding from $86,647 to $124,647, (an increase of $38,000) and an extension on completion dates. According to GMHC the need for the increase is due to the drop in home values. A new pro-forma has been developed for this project. GMHC and the EDA have entered into a similar agreement for property located at 4141 Jefferson Street, with the same style and type of homes being built. GMHC has recently sold the Jefferson Street homes for $230,000 and in January entered into a Purchase Agreement for $200,000. Based on these sales and market conditions GMHC has set a new target sales price for the 2nd Street houses at $210,000 each. Section 3.5 (c) of the Redevelopment Agreement states "The Authority [EDA] shall not be responsible for any deficit incurred by the Redeveloper [GMHC] in the acquisition, construction and sale of the Minimum Improvements." Staff suggests the EDA discuss the following options: 1. EDA amend the contract to increase the gap financing to $124,647 2. EDA amend the contract to split the gap financing increase with GMHC 3. EDA deny the request to increase the gap funding 4. EDA extend the commencement date to May 1, 2010 and completion date to December 31,2010 The houses have not been built at this time. The EDA should consider whether or not this is a good time to build two new homes and selling them in this market. The EDA should consider the chance that the increase in gap requested might not be enough once the houses actually sell and GMHC may request even more assistance. Staff has requested GMHC to review the option of building a smaller different type of home on the subject site. The response from GMHC was "the drop in sales value would be greater than the savings in construction costs." This response is based on current market factors. RECOMMENDATION: Staff recommends the EDA direct staff to amend the agreement to extend the completion dates by one year and to deny the request to increase the gap at this time for development of 3805 2nd Street property. RECOMMENDED MOTIONS: Motion: Move to deny the Greater Metropolitan Housing Corporation's request to increase gap financing from $86,647 to $124,647 for the redevelopment of 3805 Second Street. Motion: Move to waive the reading of Resolution 2009-05, there being an ample amount of copies available to the public. Motion: Move to Adopt Resolution 2009-05, Amendment to Contract for Private Redevelopment by and between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and the Greater Metropolitan Housing Corporation dated November 27, 2007. Attachments: Resolution, GMHC reauest and Pro-Forma, EDA ACTION: EDA Resolution 2009-05 Amendment to "Contract for Private Redevelopment by and Between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and Greater Metropolitan Housing Corporation" dated November 27,2007 WHEREAS, on November 27, 2007 the City's Economic Development Authority (EDA) approved an agreement entitled, "Contract for Private Redevelopment by and Between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and Greater Metropolitan Housing Corporation (the Agreement), and WHERAS, this contract outlined the terms and conditions for redevelopment of property addressed as 3805 Second Street, and WHEREAS, the end result of the redevelopment is the construction and sale of two single family homes by Greater Metropolitan Housing Corporation, and WHEREAS, Section 4.3 (a) "Completion of Construction" requires a commencement date of May 1, 2008 and a construction completion date of December 31,2008. WHEREAS, due to economic conditions causing declining sales prices the redevelopment project has been delayed. NOW THEREFORE BE IT RESOLVED, The Economic Development Authority hereby agrees to amend Section 4.3 (a) of the Agreement to change commencement date from May 1, 2008 to May 1, 2010 and complete construction date from December 31,2010 to December 31, 2009. Passed this day of ,2009. Offered by: Second by: Roll Call: President - Executive Director, Walter R. Fehst GREATER METROPOLITAN HOUSING CORPORATION 15 South Fifth Street, Suite 710 . Minneapolis, MN 55402 Telephone: 612- 339-0601 EXT 16 . Fax: 612-339-0608 e-mail: bbuelow@qmhchousinq.orQ . website: www.gmhchousing.org Ms. Sheila Cartney Assistant Community Development Director City of Coiumbia Heights 590 - 40th Avenue N.E. Columbia Heights, MN 55421 January 6, 2009 RE: 3805 Second Street N.E., Columbia Heights, Redevelopment Dear Sheila: As you know, The Greater Metropolitan Housing Corporation (GMHC) has a redevelopment contract with the Columbia Heights Economic Development Authority for the demolition of one existing boarded up home, and the construction of two new single family homes at 3805 2nd Street. Unfortunately the down turn in the real-estate market has delayed and complicated our project. Because of slow home sales and falling home values in the area, we have been forced to delay the project until our other new homes on the market in Columbia Heights have sold. I am please to tell you that we have finally now sold both of our homes on Jefferson Street and we can now turn our attention and resources to 3805 2nd Street. GMHC is requesting from the EDA an increase in the GAP funding for this project in the amount of $38,000 to compensate for the drop in home values; Raising the GAP from $86,647 up to $124,647. GMHC is also requesting a time extension to our contract; Commencing Construction on or before May 1, 2009 and Substantial Completion of Construction by December 31, 2009. Attached is a detailed Revised Pro-Forma for the project. Also, I have looked into the option of constructing a smaller and different style of home. For example; we could construct a split-entry or rambler style home with less finished square footage. But the drop is sales value would be greater than the savings in construction costs. Our experience is that the two- story model homes that we have built in Columbia Heights are the most efficient model to build, fit nicely into the area and are the most desirable model of home to our buyers. I will continue to look into options but I believe we have a great plan in place if we can overcome the drop in home values in the area. Thank you for your consideration, and if you have any questions, or need additional information, Please call me at 612-330-0601, EXT. 16. I Sincerely, L--J ~ ~ Bill Buelow Director of Construction GMHC RESIDENTIAL PRO FORMA ':.C-,e.' ;1" ',.- ,_. _._---~- .. 'l' -...---. ;',:; -- m..._. - ._._-~ REVISED Date: 1/06/09 ,,' . - , -.----..--- <,'.... ------~~-----_._._._- ----.-----.-- Original Revised 1-6-09 Property Address: 3805 2nd Stre",h.., Columbia Heights - -- ~._----,-- ---- .n__ --------...- ___. .______~.u_ Project _:' Project -' Total l; "'-'--- Total Model: ( 2 ) Two--Story, Singl",:FalYl~ly Two Houses Two Houses .----- - -, -.-..----- ;~:;1;~:~ Estimated Construction Costs for Two Houses I;\\W~; Demolition and Site Clearing $15 000,;i;'2~'--$15 000 . ----... I '_,~'l;." , Contractor base price $230,000~~;\; $225,000 GMHC ~ewer I_VVater Installation $ 14,0001;[i,";, $14,000 Street Paving ----. $Oi'(1: $0 GMHC appliance package $3,000 li::;(" $3,000 ...---.-....- GMHC lumber package $92,000 Ii::!,"~ $89,000 GMHC cabinets and toes ::-:::mll~!: $12,bOO ..-.-... .-- GMHC security system ( NIC L___.___. $0 Contingency -.----- $7.000 ------. Total Construction Costs wi Conti_n!!.ency __ __ $377,000 V $365,000 ___..__.m Estimated ...-- ..._-_.__..._--~-_.._.__.- -.- ~ .~.,'" .------------. Soft Costs ----~_.-----------_..._- .-...-,--- -.~-- ,-----. __.n_ Financing interest ..--- ----.....------ ~- $12,000. : ~12,01l.Q. -.-.--- Property taxes . --- ~_.__._..- -~--_._--_._. -- 11,2_82 [ii'!!1 . $1,282 Outstanding Assessments $1915",'1-;" $1,915 Insurance - :t~~~ !~(!ll -- -- $900 -- --- Title and reco~_____ -- $1,200 -- Survey $3,000 Marketing and Closing costs --.-. ..--- $25,200 ~rr';:" .. $25,200 ~eraisals $650 ii'-}:,:' $650 .-.... -. -- ...- '-','..Y'~--- \Jtilities ... $1,200[.';;' $1,200 _.~;~!,'.':,,'~._~_.~-- Property management (est. 3 months) -- $1,200;,'1,:", $1,200 Architect fees I Printing I Advertisement $600 ,,:[!.(: $600 . :f",,,,_.". Soil Testing $1 ,500 [l'3;f,: $1,500 -- --- iQ~Wii) iQ Legal ....-. - Total Soft Costs -- $50,647 ~1)i:!ri $50,647 - - ~----_.- , ~-_....... ----.-------.-.---. -- ..---- -~._.~,-, _La_nd Acquisition Costs $105,0001 ,~__ $105,000 -----~- --- .-.-.-.--. ------- ----- _n____ ~-~_..- -- $24.000' " -- ------.- QI\III:IC Developer fee ~24.000 . ~~ _._n . $556,647 ,::,;; $544,647 Total Development Costs .--- ~- '-J.:;" ~:,;";-'" -- .-_.~----- kj;k.-". Estimated Sale Price $470,000 ;1 "", $420.000 -...-- --- - ~-- -- -- -- ---- ',>:-. GAP $86,647 ~:i,:__,..r $124,647 ".~:' ;.::.: (;~:;,~~: Requested increase in GAP funds of $ 38,000 for Total of $ 124,647 I I COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: January 27,2009 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO: 8 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Commercial Development BY: Scott Clark BY: Agreement for 4707 Central DATE: January 16, 2009 Avenue BACKGROUND: On September 23, 2008 the Economic Development Authority approved a Redevelopment and Tax Increment Agreement with Grand Central Commons, LLC for development of a 52,000 sq.ft. commercial/office space project located at 4ih and Central Avenue. This project had a number of issues, specifically the need for sewer expansion along Central Ave. and some leasing issues, that made a fall construction in 2008 questionable. The developer has relooked at the project's economics and come back with a different proposal. The original plan (attached) would be changed by eliminating the second floor above Aldi's, and decreasing the overall project space to 35,000 sq.ft. The purpose of this agenda item is two-fold: 1) to garner if the EDA supports giving tax increment assistance to the new project and 2) the willingness to have a special EDA meeting on February 9, 2009 to act on a new agreement. The key changes would be: 1) Reduction of project size from 52,000 sq. ft. to 35,000 sq. ft. and reduction of the parking ramp to 180 stalls (230 was the original target). 2) A proportional decrease in tax increment assistance (estimated between $300,000 and $330,000) and the minimum assessment amount. 3) Staff will need to confirm the Metropolitan Council's acceptance of the project changes 4) Re-establishing new start and completion dates. At this time, if the developer is to receive tax increment financing he will need to incur his tax increment qualified costs (meaning actual expenditure of the TIF amount) by July 23, 2009. 5) Outside of the EDA's approval, this project would have to go back to the Planning Commission, possibly the City Council, and undergo new building permit reviews. RECOMMENDATION: If the EDA is in consent with the new project outline, staff recommends a special EDA meeting on February 9, 2009 to review an amended agreement. RECOMMENDED MOTION: Move to set a special EDA meeting for Monday, February 9, 2009 at 6:30 p.m. in the City Hall, Conference Room 1. Attachments: Revised Development ConceDt Drawino EDA ACTION: G:/Communily DevelopmenVEDNKhoraUy Development Agreement revision 1-27-2009 fi,{t~'--'- 6~' /~ ------. I~V '", \~) / " I ' , /' \ !.' ""e-ill/ ii' '1 J:\~ i: />t.n,W"'-. 1;:1 /"" t I ""- L..ll! ./' I', H;i / ' '''-.. Oil // , '" '1IPf'. I ' 0- -ER... 'f'IMJ.:Tl'lor~.Lrli:lcf.~ r-; :1 I: ' I I ~.U Ii; i \ : i I I ~r-. \ i ltt1 8--+1 Ii ill I I I n ~ e1F111 I ! I L: I I I ~ 0\11 1 \ :! ; I i ]1 I,: C)--Hlll rfti-I +t-HI ; qJu i ill i i U I : I 0-. -++ . , ~. n (0-.' - H B ~!I . I I , I. I , i I ~l Ii II.~ H d Ii ~ , '1 . ~q , I ' I I I I I I : ' i Ii! ::rr1J2o:hb:b / / // ,/ ", ,/ / "'- ...... / / / j/ I i '.... ,/ '.... / !' t ~ / l~ -Z i /' 1 ~ J , ""t1! ".... / ~ / ~ r---'--1 ",I -.......j I ,-----..-- , , I . I , I ~I J I i , i _.._1. I j I \ ., f Ii / / ! I I I IlL' L -..---- -~--,-_.. ~,----~,-- . ---- ...J II' - II. 11 .~_.-------!.. i 1 I I I JI "I ~.:::. " .... ^' Q. ~I ~I ~! tll "-..1 -:l\ ~\ C:I, ~! ~I ~j l:/.' ,,:1 \\\ ! i i I COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: January 27, 2009 AGENDA SECTION: Business Items ORIGINATING DEPT. EXECUTIVE NO: 9 Community Development DIRECTOR APPROVAL ITEM: Adopt Resolution 2009-07, Schafer BY: Sheila Cartney BY: Richardson Redevelopment Timeline DATE: January 16, 2009 BACKGROUND: On October 25, 2004 the City, EDA and Huset Park Development Corporation entered into contract for private redevelopment of the "Industrial Park." On August 1, 2007 the same parties agreed and entered into an Amended and Restated Contract for Private Redevelopment. The "Minimum Improvements" in the contract is broken out into phases and includes three different housing types and one commercial space. According to the contract there are to be a total of 277 townhouse units, 50 senior units, and 183 condominium or cooperative housing units and 11,650 square feet of commercial space. Due to the down turn in the housing market and economic conditions, Schafer Richardson has requested completion date amendments to the development contract. The following table represents the amendments requested per phase. Phase IB Housin IIA Housin liB Housin IliA Housing and Commercial IIIB Housing Commence by 12/31/2010 complete by 12/31/1012 Commence by 12/31/2012 complete by 12/31/2014 IIIC Housing Staff supports the proposed changes in dates. At the time of drafting of this memo, the final Resolution was not received by the Attorney and will be handed out at the EDA meeting. RECOMMENDATION: Staff recommends the EDA amend the development contract as requested to change commencement and completion dates for the units in the Huset ParklParkview Development. RECOMMENDED MOTION: Move to waive the reading of Resolution 2009-07 there being amble copies available. Move to Adopt Resolution 2009-07 amending the development contract between Schafer Richardson and the EDA dated August 1, 2007, changing commencement and completion dates. EDA ACTION: Attachments: Resolution, Reauest from Shafer Richardson, Phase MaD I) Redevelopment Agreement Deadlines and suggested modifications. Phase IA- ok Phase IB- Senior Rental, change from "Cooperative," 80% complete by 12/31/2010. This is possible by 4/30120 II with fall 20 I 0 construction start. Phase IIA- 103 Total, 80% (82.4) complete by 4/3012009. Currently 47 done or under construction (46%). According to our agreement with Ryland: 16 units sold to Ryland in 10/08. Won't start until 50% units sold. 18 lots purchased 4/09 by Ryland. Earliest completed is October 2009 (depending on sales). 2 more lots (to get to 80% complete) purchased 12/09 by Ryland. Earliest completed is June 2010. Phase IlB- 51 Total, 80% by 12/31/2009. March 2011 purchase by Ryland according to our agreement. Earliest complete is July 2012. Phase IIIA- Commence by 12/31/08, complete by 12/3112010. Suggest commence by 4/20 I 0 and complete by 4/2012 Phase IIIB- Commence by 12/31/2010, complete by 12/3112012. Suggest commence by 12/31/2012, complete by 12/31/2014 Phase IIIC- Commence by 12/3112012, complete by 12/31/2014. Suggest commence by 12/31/2014, complete by 12/3112016 ~ "" s ~ 53 u 00 I. ~ l;-< Z . ZQ ,!:ill-:'{ P< !~ ~. ~~ ~ ~3 lIi &Lr :J:t.. I, . , .,. .0 ....' 6'" , 4~ III!- ~- It :I ~ ...:.l ~ ~ >-< rn ~ ~ ~ Iii j tII . I' ~. .~ ~ i i ! i p ~ !! .~ - , ~ .' ..'r- ~.. .~!/ffl' .:~: c:::-~=-- . ....'~'''.:...Ql(('-'''--'J!l!r.::.~ '!H","""""In.. ~",1~ ..- ~..'i- ~,\C C-- ..............1......_. 2 ~ ~ ~t ~ o..~ a 'flj.. '.~. IQ lid ~ f~ ~ '0 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: January 27, 2009 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO: 10 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 2009-04, BY: Scott Clark BY: Decertification of TIF Districts DATE: January 22,2009 P3/P4/S7 BACKGROUND: This is an administrative clean-up item for the EDA. ON February 27,2007 the EDA was presented a TIF decertification resolution for a scattered site redevelopment district (P3/P4/S7) that statutorily ended on December 31,2006. The EDA had some additional questions but current staff can't find a trail as to any continuance of this action. Because the EDA did not take an official action the County continues to send tax increment receipts to the City, but these are simply being held in an account since the district has ended. Upon action of this item by the EDA, the aforementioned receipts will be returned back to the County who will then redistribute the proceeds to the respective governmental entities. RECOMMENDATION: Staff recommends approval of Resolution 2009-04 as written. RECOMMENDED MOTION: Motion: Move to waive the reading of Resolution 2009-04, there being an ample amount of copies available. Motion: Move to Adopt Resolution 2009-04, a Resolution Approving the Decertification of Tax Increment Financing District P3/P4/S7 of the City of Columbia Heights EDA. Attachments' Resolution 2009-04 EDA ACTION: G:\Community DevelopmentlEDA 2009\Res.2009-04. Decertification of P3,P4,S7 TIF Districts CITY OF COLUMBIA HEIGHTS ECONOMIC DEVELOMENT AUTHORITY COUNTY OF ANOKA STATE OF MINNESOTA RESOLUTION NO. 2009-04 RESOLUTION APPROVING THE DECERTIFICATION OF TAX INCREMENT FINANCING DISTRICT P3/P4/S7 OF THE CITY OF COLUMBIA HEIGHTS EDA WHEREAS, on May 27, 1997, the City of Columbia Heights Economic Development Authority (the "EDA") created its Redevelopment Tax Increment Financing District No. P3/P4 (Housing TIF #1) (the "District"), within the Central Business District Redevelopment Project (the "Project"). WHEREAS, on December 17, 2001, the EDA expanded the geographic boundaries of the district (the S7 geographic enlargement). WHEREAS, an Internal Fund Loan obligation, previously authorized, has been paid and the obligation is no longer outstanding, and WHEREAS, there are no parcels located in the District which currently have delinquent taxes under the duration limits; and WHEREAS, the Tax Increment Financing plan adopted on May 27, 1997 for Tax Increment Financing District No. P3/P4/S7 requires, pursuant to M.S. 469.176, Subd.1 b (a) (4) redevelopment districts, that the duration of the Tax Increment Financing District P3/P4/S7 Housing TIF #1 will be 25 years from the receipt by the EDA of the first tax increment, and WHEREAS, the receipt of first tax increment was July of 1998; and WHEREAS, December 31, 2023 is 25 years from the first receipt of increment, or the statutorily required expiration date, and WHEREAS, the EDA desires to decertify the District prior to its statutorily required expiration date; and NOW THEREFORE, BE IT RESOLVED by the Economic Development Authority of the City of Columbia Heights that the EDA's staff shall take such action as is necessary to inform the County Auditor of Anoka County that the District is decertified and to no longer remit tax increment from the District to the City. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this _ day of 2009. ATTEST: Executive Director- Walter R. Fehst President (Seal) COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Meetina of: January 27, 2009 AGENDA SECTION: Business Items ORIGINATING Executive NO.11 DEPARTMENT: Community Director Development Approval ITEM: Adopt Resolution 2009-06, Amend Contract BY: Sheila Cartney BY: with GHMC for Additional Financial Assistance for DATE: January 9, 2009 Property Located at 4141 Jefferson Street BACKGROUND: On May 14, 2007 the EDA entered into an agreement with Greater Metropolitan Housing Corporation (GMHC) for the redevelopment of the residential property located at 4141 Jefferson Street. At that time the property contained one single-family house on a double lot. As part of the agreement GMHC was to demolish the house and redevelop the site with two new single-family homes; with financial assistance from the EDA. The EDA agreed to provide $65,050 in funding to make this project feasible for GMHC. The $65,050 was obligated through Fund 226 "Special Projects." The target sales price for the homes was $235,000 each. To date the existing house has been demolished and two single-family homes have been constructed on the site. GMHC is requesting the EDA to increase the funding from $65,050 to $88,850, (an increase of $23,800). According to GMHC the need for the increase is due to the drop in home values; both homes have sold for under the anticipated sales price. One home sold for $230,000 and the other for $200,000. A new pro-forma has been developed for this project that itemizes the actual costs. Section 3.8 of the Redevelopment Agreement states "The Authority [EDA] shall not be responsible for any deficit incurred by the Redeveloper [GMHC] in the acquisition, construction and sale of the Minimum Improvements." Staff suggests the EDA discuss the following options: 1. EDA amend the contract to increase the gap financing to $88,850 as requested 2. EDA amend the contract to split the gap financing increase with GMHC 3. EDA deny the request to increase the gap funding The objectives of the development agreement have been met. The market conditions have forced the sales of these two single-family homes to be less than what was anticipated two years ago. Because the site has been developed according to the agreement and the houses are now owner occupied, staff suggests the EDA split the requested gap increase. The difference dividing by 50% equals $11,900, if this occurs the EDA would be providing $76,950 in gap financing. Fund 226 has a balance of about $200,000. RECOMMENDATION: Staff recommends the EDA split the new gap with GMHC and provide $11,900 more in financing using Fund 226-Special Projects. RECOMMENDED MOTION: Motion: Move to waive the reading of Resolution 2009-06, there being an ample amount of copies available. Motion: Move to Adopt Resolution 2009-06, Amendment to Contract for Private Redevelopment by and Between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and the Greater Metropolitan Housing Corporation dated, May 14, 2007. Attachments: Resolution, GMHC reauest and Pro-Forma, EDA ACTION: EDA Resolution 2009-06 Amendment to "Contract for Private Redevelopment by and Between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and Greater Metropolitan Housing Corporation" dated May 14, 2007 WHEREAS, on May 14, 2007 the City's Economic Development Authority (EDA) approved an agreement entitled, "Contract for Private Redevelopment by and Between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and Greater Metropolitan Housing Corporation (the Agreement), and WHERAS, this contract outlined the terms and conditions for redevelopment of property addressed as 4141 Jefferson Street, and WHEREAS, the end result of the redevelopment is the construction and sale of two single family homes by Greater Metropolitan Housing Corporation, and WHEREAS, the agreement called for payment of up to $65,050 in gap financing by the Economic Development Authority pursuant to Section 3.3(a), and WHEREAS, due to economic conditions causing declining sales prices the redevelopment gas has increased to $88,850, an increase of $23,800, and WHEREAS, The EDA is "not responsible for any deficit incurred by the Redeveloper (defined within the Agreement as Greater Metropolitan Housing Corporation) in the acquisition, construction or sale of the Minimum Improvements", and WHEREAS, although not obligated to provide additional funding, the EDA is electing to divide the increased gap financing amount by 50% ($11,900) for a total assistance of $76,950. NOW THEREFORE BE IT RESOLVED, The Economic Development Authority hereby agrees to amend Section 3.3 (a) of the Agreement to increase the amount of Authority Assistance to $76,950. The Authority Assistance shall be paid from Fund 226 "Special Projects." Passed this day of ,2009. Offered by: Second by: Roll Call: President - Executive Director, Walter R. Fehst GREATER METROPOLITAN HOUSING CORPORATION 15 South Fifth Street, Suite 710 . Minneapolis, MN 55402 Teiephone: 612- 339-0601 EXT 16 . Fax: 612-339-0608 e-mail: bbuelowrawmhchousim1.orQ . webslte: www.gmhchousing.org Ms. Sheila Cartney Assistant Community Development Director City of Columbia Heights 590 - 40th Avenue N.E. Columbia Heights, MN 55421 January 6, 2009 RE: 4141 and 4139 Jefferson Avenue N.E., Columbia Heights, Redevelopment Dear Sheila: As you know, The Greater Metropolitan Housing Corporation (GMHC) has a redevelopment contract with the Columbia Heights Economic Development Authority for the demolition of one existing boarded up home, and the construction of two new single family homes at 4141 Jefferson Ave. I am pleased to report that we have finally accepted a purchase agreement for the last available house. Unfortunately, we are in a position where we needed to accept considerably less for the two homes than we had anticipated. The down turn in the real estate market has dropped home values in the area significantly. GMHC is requesting from the EDA an increase in the GAP funding for this project in the amount of $ 23,800 to compensate for the drop in home values raising the GAP from $ 65,050 up to $ 88,850. Attached is a detailed Pro-Forma for the project. The Pro-Forma itemizes our actual project costs compared to our pre-construction projections, which our re-development contract was based. To summarize the Pro-Forma; . Column "A" represents the pre-construction projected costs, and Column "B" represents the actual project costs. . The Actual total Construction Costs were $ 20,474 under our budget. . The Actual total Soft Costs were $ 4,218 over budget. The over runs are caused by the excessive holding costs. . Our Total Development Costs were $ 16,200 under our budget. . Our Income from sales of the two new homes was $40,000 less than anticipated. . Our GAP needed for this project is $ 88,850. This represents our requested increase of $ 23,800 in GAP funds. Thank you for your consideration, and if you have any questions, or need additional information, Please call me at 612-330-0601, EXT. 16. Sincerely, t-.-)- ~ Bill Buelow Director of Construction Date: REVISED 1~06.09 GMHC RESIDENTIAL PRO FORMA 4141 Jefferson Street, ColumbIa Heights Property Address: Model: (TwoY- 2-Story Single Famllv 1670 SF Estimated Construction Costs Demolition and Site Clearin~ Contractor base price GMf-IC Sewer J Water InstallatIon GMHC aooliance nackaaa GMHC lumber pack.age GMHC cabinets and to s GMHC securltv system ( NIC Contingency Total Construction Costs wI Contlnooncv Estimated Soft Costs Flnancinn interest Pronertv taxes Insurance Tille and record Inn J lenal Survey Closing costs and Marketlng Annraisals Utililles Prooert mana;,ement lest. 3" months\ Architect fees I Printinn I AdverUsment Soil Testlnn Legal Total Soft Costs Land Acquisition Costs GMHC Developer fee Total Development Costs Estimated Sale Price GAP B:!\l):(~P.~:~1\~Jn~r~~~~iQf;$:~~i~PP'!I;ii?\;ifr;. ':,. ';,; ~; ,;\ . .>,. ,. . ~.' . \, ",.," " .,. ..:'(':'1 ; ~ ;':, I Pre-Con Estimated Costs '::(', C-ltv-Contract City Contract ~~~~;i ;r.ti:'p Project t[1;~\:. Total T ,~~f' otal l\&<i,l Two Houses '(Ii-' Two Houses~~~*lJ '!,!~l ~R~1f~b}j!.~1~!..mt~~)~~~~fi;:-1~[tiilJl~ltii}fJil ~\'.!;;:,I: $15,000n';;iii $230 000 *~;~U ~.Jt1:' $14 000 tti~~~ $3.000 l~~~; $92,000 ;1i~.ll $13,OOOq,~~\1 $0 \YMl :Il10 OOQJ:i\\I!f- "~~.~\i $377,000 ,,:W $366,526 $177,511, '}r'/; --~.~~- ---~- .-.- Averaoe Cost Per House $7 500 $115000 $7,000 $1500 $46.000 $6.500 $0 $5.000 $168:500 $6 000 '300 --'-450 $600 $1500 - $12,600 $325 $600 $600 '300 $750 M! $24,025 $43,000 $12.000 $267,525 235 00 $32,525 " 'l ::,:,:::}\::,~'~i%:),~;!(:;.~wm;:::;.\'i;J::j~::::::rg,: J, 116/2009 Actual $0 $319480 $17,000 $6 779 $0 $10.867 $2 400 M! $12,00oi::(!?--~5.8o:i $600 ~1~~;i $3,077 $900!lh~!: $1917 $1.200 i::,~' $0 $3.000 ~~.~t $1,505 $25.200 !~;ri! $25,642 $650 !J~~8:~j~ $0 $1.200~\~I;i!: $1475 $1 200i;N(~: $2158 $600 '~i::~J $113 $1 500 ,r"!i $0 I' .$.Q ~~I!1 $578 $48,050 ,i';\) $52,268 ii~tr------. ~:~~il $86 000 .:hi'" $86,056 , ~f::Wi~ $24.000 _!\~;! $24,000 $618,850 0430 000 $68,850 SOLD 1/6109 Actual 4139 House $0 $159.101 $8 500 $2.763 $0 $5,927 $1200 $0 $7,971 $0 $612 $0 '752 $12821 $0 $746 $1.397 $50 $0 M! $24,351 SOLD 10/39/08 Actual 4141 House $0 $160.379 $8 500 $3,996 $0 $4940 $1200 ~ $179,015 ---$7,832 $3.077 $1,305 $0 $753 $12821 $0 $727 $761 $63 $0 '578 $27,917 $43,028 $43,028 $12,000 $12,000 $256,890 $261.960 200 000 $230.000 $56,890 $31,960 -- I, ; i I I I I ,I i , I I I dfr~ Administrative Report 1) Pursuant to discussions with the City Council in December, on January15, 2009 staff met with State Representative Carolyn Lane regarding legislation that would extend the five- year rule for the Kmart Redevelopment Tax Increment Financing District. Attached is all of the material that was presented to her at that time, Staff will give an update to the EDA at the meeting, 2) At the EDA meeting, staff will distribute a booklet entitled, "Columbia Heights Industrial Park Redevelopment Project" that details the history of the Husetllndustrial Park redevelopment efforts, Columbia Heif!ltts Five-Year Rule Amelldmellt LeJ!islatioll Wltat tax illcremellt legislatioll is tlte City of Columbia HeiglIts proposillg? The City's Economic Development Authority ("EDA") is requesting an extension of the five-year rule under Minnesota Statutes, Section 469.1763, subdivision 3 for the Kmart/Central Avenue Tax Increment Financing District (the "TIF District") from an ending date of July 23, 2009 to July 23,2014. The subject rule limits the EDA's ability to issue any new obligations or enter into contracts after five years from the original date of certification. Wltat is tlte Itistory of tlte existillg tax illcremellt district? The TIF district was certified by Anoka County on July 23,2004 as a 15 year "Renewal and Renovation District." and will expire on December 31, 2021. The District was created to assist in redeveloping a vacant Kmart site into 218 units of owner occupied units consisting of 198 condominiums (3 buildings comprised of 66 units each) and 20 town homes and thc construction of a minimum amount of 10,000 sq ft. of commercial space. Due to housing market conditions and over-building of the condominium market, only 10 of the townhouse units and 66 of the condo units have been constructed. In addition, the EDA has an approved development agreement in place for the commercial space, but this project is also on hold due to economic considerations. The City has serious concerns with a proportionately high number of foreclosure units located in a neighborhood adjacent to the TIF district, the EDA is in the process of modifying the district to geographically add this area. The neighborhood is rapidly deteriorating and is comprised primarily of 50 duplex units that have a 24% foreclosure rate, serious crime issues and overall physical building and infrastructure decay (map attached). The unobligated increment generated from the existing TIF district, and the modified area, would be utilized by the EDA to acquire the foreclosed homes and either remodel them for resale or demolish the structures and resell the lots for construction of new homes. Wit at repercussioll does tlte City of Columbia Heigltts face by Ilot gettillg tlte five-rule extellsioll ? Once the five-year period has been reached any new obligations (e.g. pay-as-you go notes or bonds) would be treated as expenditures outside the district and subject to strict pooling limits. The net effect is that new obligations are not practically possible in any significant amount. This creates the following ramifications to the City of Columbia Heights: 1) The EDA currently has an approved developer's agrecment for a 50,000 sq. ft. retail facility. This proposal calls for $440,000 in tax increment assistance by means of a pay-as-you-go note. Due to the severe economic climate this project may not be constructed until late 2009 or possibly 2010. Because the costs to be reimbursed with a pay-as-you-go note will not have been spent within the five-year deadline, the agreement could not be implemented and the project would be lost. 2) The EDA is expanding the 'I'll' District to help address the severe foreclosure crisis in the City, with the goal of using increment to help acquire and rehabilitate or otherwise redevelop the affected housing. However, such eligible costs cannot be incurred with the five-year rule limit, so the opportunity to use the increment from the 'I'll' District for this critical effort will be lost. What are the overall benefits to the City by securing this amendment? This extension allows the EDA to I) complete the original redevelopment goals for the TIl' District, by ensuring that the existing commercial project can be successful if economic considerations force its delay into late 2009 or 20 I 0, and 2) leverage the increment for thisI'll' District to help address the foreclosure crisis in an area adjacent to the original TIl' District, which also helps prevent the emergence of blight that might impair the EDA's investment within the original 'I'll' District boundaries. Like many first ring suburbs, (and indeed, the State as a whole), the City has been affected by general economic decline that has created significant delay in development projects, compounded by a serious foreclosure problem, all of which has created the need to amend this time sensitive rule in order to complete a difficult and complex redevelopment project. Kmart I Central Ave. TIF District and Proposed Amended Area -' --J c-"'-~ ~ <( :;: ~ <; ~ M ~ u; ;: ~ ~ 0:: <D N "' 0 N I- -.::.. 0 0 ~ :: ~ :: ~ ~ N N ~ '" ~ ~ ~ ~ ~ ~ z w ...... 49TH u \- 4849 0 N 0 " 0 " 0 0 0 '" "' 0 :: " '" <D ... N 0 0 ~ ~ ~ ~ :: N .:: ~ ~ ~ ~ ~ ~ ~ rmllliIJ] "'iA '" 4a4 ~ "111,] IdlW' .. :J, /~ , ~ I- ~o ~ ~ 480 \..: ,"L'JtEW= 47T : "~ ::: ~I ~ " ::~~:~"" 4624 4629::::;i62L:1H!:: ~7 ::~: o:::llit ;4618 :.: 4609 4608 g 4607 ~ /?' 4"06 4606 >- '0 _ 1111 ~ ........ ...:;...........~ I II 4556 4555 V..4656 4557 4554 4555 3HE Area Being Processed (4550 4549 4548 4549 4550 for Modification r 4546 4543 4543 4546 4540 4542 4536 4537 4536 4530 4531 4526 4525 4520 4519 4811 4801 4757 ~ ?/ - 4707 0 4729 Z <( ~ <.9 . 124% Foreclosure Rate ~ 4657 t; '" I '" I '" 4653 46a7 4634 4641 4633 ~~ 4628 4622 4621 4619 4616 4615 4605 tt 4607 >= 1001 4532 4535 if 4517 1*- Foreclosed Property 1 r- o 1039 .>',1"'0\3:.: Original District 1 ~ BOREALIS LN fo 'r-- to co co ~ / ~ U) 0 .... .... t::.... N N /" .... .... .... )' -'\ ~ M In Ln ~'{,> '1J,~~N 1131 KH;B;R:N J'~i'Z~~ .... ""'.... N N /,... .... .... .... ~~~\LO M....M 1- ..;. !V~~ Fl ~N I); ~ (\ ~ ~~~~~ ~ ~;;;;;~; 1070 UNITS: 100-119,200-209,300-320,400-415 1069 4535 4534 4534 4530 II Location Map - 4653 4650 I- 465 4645 4644 464 4639 4638 ~ 4633 4632 ~ 4627 4626 ~ 4621 4620 4615 4614 ~ 461 4609 4608 ~ 460. 4603 4602 a.=- 4557 4555 ~ 0 0 0 0 '" <D B~ N N ... 0 N " ~ ~ ~ ~ 4539 '" "' ~ ... " _0 ~ N N 0 4531 ~ N N N " ~ ~ ~ ~ 451/2 ~~ ;!~l~ g~l~ 145091~ NNI ~ ~ 01~ W~~E S